A study had been conducted on the education levels

(none, bachelor’s degree, master’s degree, or PhD) and monthly salary based on the years of work experience each participant has and their age. Indicator (dummy)

variables are assigned to the education levels.

a) How would you code the variables? (How many dummy variables do you need? What values would they have?)

b) Do the indicator variables make sense?

c) Do you think a regression with the indicator variables would monthly salary better than the one without those predictors?